More Doctors Giving Up Private Practices

GARDINER HARRIS

Friday

Mar 26, 2010 at 5:08 AM

The delivery of medical care is changing as more young physicians take jobs with heath systems.

WASHINGTON — A quiet revolution is transforming how medical care is delivered in this country, and it has very little to do with the sweeping health care legislation that President Obama just signed into law.

But it could have a big impact on that law’s chances for success.

Traditionally, American medicine has been largely a cottage industry. Most doctors cared for patients in small, privately owned clinics — sometimes in rooms adjoining their homes.

But an increasing share of young physicians, burdened by medical school debts and seeking regular hours, are deciding against opening private practices. Instead, they are accepting salaries at hospitals and health systems. And a growing number of older doctors — facing rising costs and fearing they will not be able to recruit junior partners — are selling their practices and moving into salaried jobs, too.

As recently as 2005, more than two-thirds of medical practices were physician-owned — a share that had been relatively constant for many years, the Medical Group Management Association says. But within three years, that share dropped below 50 percent, and analysts say the slide has continued.

For patients, the transformation in medicine is a mixed blessing. Ideally, bigger health care organizations can provide better, more coordinated care. But the intimacy of longstanding doctor-patient relationships may be going the way of the house call.

And for all the vaunted efficiencies of health care organizations, there are signs that the trend toward them is actually a big factor in the rising cost of private health insurance. In much of the country, health systems are known by another name: monopolies.

With these systems, private insurers often have little negotiating power in setting rates — and the Congressional health care legislation makes little provision for altering this dynamic. If anything, the legislation contains provisions — including efforts to combine payments for certain kinds of medical care — that may further speed the decline of the private-practice doctor and the growth of Big Medicine.

The trend away from small private practices is driven by growing concerns over medical errors and changes in government payments to doctors. But an even bigger push may be coming from electronic health records. The computerized systems are expensive and time-consuming for doctors, and their substantial benefits to patient safety, quality of care and system efficiency accrue almost entirely to large organizations, not small ones. The economic stimulus plan Congress passed early last year included $20 billion to spur the introduction of electronic health records.

For older doctors, the change away from private practice can be wrenching, and they are often puzzled by younger doctors’ embrace of salaried positions.

“When I was young, you didn’t blink an eye at being on call all the time, going to the hospital, being up all night,” said Dr. Gordon Hughes, chairman of the board of trustees for the Indiana State Medical Association. “But the young people coming out of training now don’t want to do much call and don’t want the risk of buying into a practice, but they still want a good lifestyle and a big salary. You can’t have it both ways.”

In many ways, patients benefit from higher quality and better coordinated care, as doctors from various fields join a single organization. In such systems, patient records can pass seamlessly from doctor to specialist to hospital, helping avoid the kind of dangerous slip-ups that cost the lives of an estimated 100,000 people in this country each year.

And yet, the decline of private practices may put an end to the kind of enduring and intimate relationships between patients and doctors that have long defined medicine. A patient who chooses a doctor in private practice is more likely to see that same doctor during each office visit than a patient who chooses a doctor employed by a health system.

The changes have increasingly put the public and private provision of health care at odds. In the Medicare and Medicaid program, the government sets most prices related to hospitalization and doctor visits. And so organized health systems are seen as a way to increase quality and lower costs, in part because salaried doctors may order fewer procedures than those in private practice.

But in the private-insurance setting, where big hospitals and health care chains have more clout in setting rates, the push for quality may put health insurance out of reach for much of the middle class.

There are political consequences, too. As doctors move from being employers to employees, their politics often take a leftward turn. This helps explain why the American Medical Association — long opposed to health care reforms — gave at least a tepid endorsement to Mr. Obama’s overhaul effort.

Gordon H. Smith, executive vice president of the Maine Medical Association, said that his organization had changed from being like a chamber of commerce to being like a union.

Dr. Michael Mirro of Fort Wayne, Ind., is among those caught in the tide. A 61-year-old cardiologist, he began his career like so many of his peers in a small private practice with two other cardiologists. They gradually added doctors until, by last year, they had 22 cardiologists, making theirs one of the largest private heart clinics in Indiana.

But in December, Dr. Mirro and his partners sold everything to Parkview Health, a growing health system that owns the hospital across the street from their building. “We had to hire more and more people to contact insurers and advocate for people to get the care they needed,” Dr. Mirro said. “That’s expensive.” As insurance rates rose and coverage weakened, patients were forced to pay out of their own pockets an increasing portion of Dr. Mirro’s bills. When the economy soured, many stopped trying.

“In the last year, the share of our patients from whom we could not hope to collect any money rose to about 30 percent,” Dr. Mirro said. Dr. Mirro and his partners had been thinking of selling for years. But they made the decision after the Centers for Medicare and Medicaid Services decided last year to cut reimbursements to cardiologists by 27 to 40 percent, depending on the type of practice. The Medicare savings in cardiology are to be used to pay more to primary care doctors, widely seen as under great financial strain.

In the wake of the government decision, cardiology practices across the country began selling out to health systems or hospitals. Dr. Jack Lewin, chief executive of the American College of Cardiology, estimated that the share of cardiologists working in private practice had dropped by half in the past year.

“And the remainder of those left are looking to move in that direction,” Dr. Lewin said. “This is all happening with or without reform passing.”

The process feeds on itself because doctors who remain in private practice worry that as their peers sell out, their own options become more limited and the prices for their own practices fall.

Although Dr. Mirro saw his decision as life-changing, many of his patients noticed little difference. Parkview let the doctors remain in their building and allowed them to continue to hire their own staff.

Mimi Strong, an 89-year-old heart failure patient, said everything was the same when she visited recently. Told in an interview that her care may now be more coordinated, Mrs. Strong expressed little interest.

But it matters to Dr. Mirro. “We wouldn’t go back,” he said, “now that we’ve seen the value of improved patient care and improved communication with primary care physicians.”

Michael Packnett, the president of Parkview and Dr. Mirro’s new boss, said that his organization was growing rapidly, while the number of independent hospital and doctor practices in northeast Indiana shrank. A key reason, Mr. Packnett said, is that many doctors have decided that the challenges of running their own businesses are simply too great.

“Now they get to refocus on practicing medicine,” Mr. Packnett said.

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